Wealth managers and their clients have survived a lot of shocks together in the past few years. In a lot of cases, that’s because the advisors wisely decided not to rock the boat any more than necessary.
They opted to freeze their overall investment posture. No untested funds that could implode in the next twist on the economic roller coaster. No dramatic allocation shifts to capture sudden opportunities or evade emerging obstacles.
But now that the VIX has finally calmed down, it’s time to take a deep breath and catch up with all the new insights that the smartest people in the market have kept having over the past few years.
Don’t panic. Help is on the way in the form of the 1-ClickTrade, which streamlines your current investment transactions, making you more efficient and freeing up time for other activities while learning how to make you better.
Think of it as an AI assistant or automated coach that sits on your desktop and alerts you to opportunities to upgrade your clients’ portfolios to the brave new world of today. It can be as aggressive or restrained as you like, but the goal is to get you back up to speed as fast as possible and then keep you there.
Every advisor will get a separate one. Like Grammarly or some other app, its whole world is confined to your desktop. They don’t talk to each other. Our tech team is good, but they’re not that good.
And we’re not ambitious enough to be that evil. However, we recognize that we work with a vast slice of the wealth management industry, and there’s wisdom in letting big data accumulate to the point where clear statistical patterns emerge.
PERSONAL COACHING, PEER BENCHMARKING
The Wealth Advisor community in the aggregate is one of our greatest shared resources. The audience extends to about 350,000 financial professionals, and the last time I checked, 85–90% of you oversee client funds one way or another.
Granted, most of you pride yourself on your independence, but it’s always refreshing to peek at how things get done at other firms.
Advisors who opt into the program will get to see the data for themselves. And there’s comfort in knowing how you compare to your peers as well as opportunity in making sure you stay ahead of the pack.
Best of all, it’s free. The crowd generates all the expertise, so as long as you’re contributing data to the pool, we think it isn’t fair to charge you for it.
And it’s just getting started. When 1-ClickTrade goes live this summer, the focus will obviously be on the “trading” that it facilitates.
Missing out on an investment idea that could help your clients? Get an alert.
Compulsively hitting “refresh” on the Morningstar screen without taking action? The app will tell you when you’ve already hit your due diligence target.
Need a digital record of the proof points that convinced you to buy or sell something on behalf of a client? Compliance will want that. We’ll store that for you.
Want to see how other advisors stock the portfolio? Although everyone’s individual data remain anonymous and confidential (we’re not evil, but we aren’t stupid either), those big patterns reveal plenty about where money moves in the industry as a whole.
SHOW ME THE NUMBERS
By the time you read this, we’ll be wrapping the initial development cycle, and active enrollment should be on the horizon. For now, 1-ClickTrade.com will give you a chance to add your name to the waiting list for the next slot that opens up.
Early response has been revelatory, especially around due diligence. Your fellow advisors are naturally hungry for alpha, which makes sense. One way or another, we all want to stay open to opportunities to outperform the random walk, and quite a few of us are actively chasing it.
Real diversification is also a hot topic. Again, in a world where correlations collapse with alarming regularity, people are looking for ways to smooth an investment experience that has otherwise lost sight of the efficient frontier.
New income sources matter a lot. And a surprising number of advisors (63%) who use the app say they’re fine with “tactical” approaches that ultimately boil down to timing the market.
I’m fine with that too. Even though nobody can time the market perfectly, a reasonably alert child can do incrementally better than holding the same index fund through thick and thin. That’s all we need. It’s all clients want.
And we’re all busy. A majority (60%) of 1-ClickTrade advisors admit that they need to evaluate each opportunity on their screen in less than a day. During that time, it takes three to five proof points to tip the scales one way or another.
That’s it. Beyond that level of clarity, the process starts to deliver diminishing returns. Education becomes an end in itself, draining resources from other areas of your practice.
I get it. Research can go on forever and it can be fun to watch the Morningstar numbers change. Furthermore, clients rarely complain about the funds we decide not to buy.
But for most of your peers, “good enough” means hitting three to five proof points in a day. That generally means category or objective, alpha against the benchmark, absolute performance and some sense of the risk profile.
That’s it. I wouldn’t know this without the data 1-ClickTrade has already started generating. And once the doors open wide, we can start applying these abstract patterns to specific investments you might’ve looked at and left the due diligence process unfinished.
An overwhelming majority (80%) of advisors say they want to be able to see what their peers are buying for clients and how the portfolios are constructed. So do I. I’ve always wanted that.
If you want it too, the 1-ClickTrade.com waiting list should be open. We’ll get you enrolled as soon as possible.
WAKE UP AND GET IN THE GAME
Sure, a lot of you are so independent that you’d rather go on alone, steering your practice according to your own stars. That’s your right.
But the rest of us are feeling overwhelmed enough to ask for a little help. My screen shows close to 3,500 ETFs out there, with 35% of them launching in the past three years.
Many are actively managed, complicating what was once a simple equity index calculation with institutional-grade approaches and once-exotic asset classes. They don’t behave like a vanilla S&P 500 fund. This isn’t the random walk.
And the managers are actively marketing themselves to anyone who will listen. That’s a lot of messaging. I can barely keep up with the email.
It gets worse if you spent the past few years focused on keeping your clients rolling through the punches. Although that was a mission critical task then, the deferred due diligence burden now can be daunting.
It would be easy to shrug and go back to sleep. Portfolios that didn’t break down too badly in the pandemic are clearly “good enough.” Someone could retire on a 60/40 allocation and never look at another fund again, right?
I sadly have to disagree. One way or another, the portfolio needs to stay responsive to evolving economic realities and the new insights that the smartest people in the market keep having. The world rarely stands still for long.
If you aren’t at least open to evolving, you’re probably already dead. And your clients don’t want to keep paying for dead ideas.
What they want (and why they keep paying) is for you, as the expert, to keep your eyes open and to alert them to obvious icebergs ahead while steering them to more attractive opportunities you encounter. They’re paying for a seasoned hand at the wheel and a good brain behind it.
Otherwise, they can find a robot eager to park them in a generic random-walk portfolio and hold it forever, rebalancing whenever the weights get skewed. Those who are content with the random-walk experience can even figure out how to buy SPY on their own account.
I’m not picking on SPY here. I own it myself. But if you’re going to charge a fee, you need to at least offer a reasonable chance at outperforming that random walk along some dimension or another: a smoother ride, a better return profile, some element of tax sensitivity, whatever.
And given the explosion of investments solutions that aim to outperform, we could all use a little help. With 1-ClickTrade, the crowd steps in. It isn’t a crowd of retail investors falling for the age-old dumb scam forever. It isn’t sleek institutions doing arcane things in the background.
Our crowd is your fellow advisors. Some of the smartest ones in the business. Welcome to the 1-ClickTrade era. I think you’ll like it.
